Forgotten password

Site Surveys & Investigation

Site Surveys and Investigation services is a process of surveying a location where a drilling rig or a platform will be positioned / installed. This process ensures that the location is free of debris, junk, wrecks and shallow gas pockets and flat seabed is identified. A number of other geohazards and environmental risks and manmade seafloor hazards are identified during the survey, with recommended mitigation actions

Importance

Leverage

Strategic

Routine

Bottleneck

Buyer Power

Strong

Price Trends

Category description

Site Surveys and Investigation services is a process of surveying a location where a drilling rig or a platform will be positioned/installed. The process ensures that the location is free of debris, junk, wrecks and shallow gas pockets and flat seabed is identified. A number of other geohazards and environmental risks and manmade seafloor hazards are identified during the surveys, with recommended mitigation actions. These surveys called interchangeably 1) marine site survey, 2) geophysical and geological survey, 3) seabed and subsurface conditions survey, 4) drilling hazard survey 5) seabed survey.

Used in various capacities and combinations during every stage of an oil and gas project, below is a breakdown of the services and type of surveys.

MARINE SURVEYS

Hydrographic

Seabed Mapping & Charting

Route Survey

Manmade Hazards Identification

Geophysical

Geohazards

Route Survey

Top Hole Stability

Shallow Subsurface Geology

Geochemistry

Geotechnical

Soil Testing

Foundation Study

Soil Strength and Penetration

Not only the surveys are required technically, they are also a mandatory requirement to provide to insurance companies, when procuring drilling or project related insurance, be it well insurance, drilling insurance or BAR insurance. The geotechnical survey is critical and compulsory for a jack-up drilling rig operations when legs of a drilling rig penetrate the seabed. The survey data allows understanding the loads to be applied, as well as to ensure that shallow gas pockets (gas accumulation) are not encountered. During rig moves, the site survey should be conducted at all times, as subsurface data tend to change over time and offset data obtained from a nearby location might not be accurate. Yet, this may not always be the case and highly dependent on the field and the information available.

At the exploration and appraisal phase, the site survey (seabed survey, hazard survey and geotechnical soil testing when a jack-up drilling rig is deployed) is used during every rig move. Normally at this stage, the survey area covers the entire block/field, unless earlier acquired data is available.

At the development stage, the survey scope includes site and pipeline route survey, geotechnical coring and platform foundation engineering analysis. This is usually part of an EPC contract to deliver a facility. Yet, there might be cases at redevelopment stages, when this is done by an operator, to help in decision making or FEED scoping.

The industry of marine surveys is known to be a hi-end technology user with multi-discipline skills. Each serving a different purpose and deployed from a dedicated survey vessel, a number of different tools used to conduct a survey. Those include echo sounders, side scan sonars, profilers, magnometers shallow seismic, remotely operated vehicle (ROV) and autonomous underwater vehicle (AUV), drilling spread for seabed and soil testing, to name a few.

Any survey is a relatively long process and done in stages:

Planning

Scope of Work and Tender Management

Survey Planning

Execution and Data Acquisition

Equipment and Vessel Mobilization

QA/QC

Change Management

Interpretation and Analysis

Data validation and Integration

Data Interpretation and Analysis

Recommendations

This BIBBY Hydromap's schematic shows a typical equipment layout.

Risks & Opportunities

Integrated disciplines coordinated and managed by a single project team is challenging

Selecting the time of the year when to conduct a survey can result in 15-35% reduction in overall cost of the survey, due to less weather downtime and more efficient data acquisition

Single-pass surveying, whereby in a single pass of a vessel a number of activities can be carried out simultaneously, would have a significant cost saving potential, as less time is required to conduct a survey

Supply & Demand Dynamics

Demand

Demand for the site survey services is driven by exploration, appraisal and development activities around the world. Around 60% of the site survey services are required during exploration and appraisal activities with the rest during the development stage. In addition, at the exploration and appraisal phase, the survey area and complexity is larger than during the field development. Although with a smaller share, offshore wind farms projects, telecom and power cable laying projects worldwide, have a direct impact on the demand for site survey services as well and are independent of the oil industry.

The site survey services would show very limited growth opportunities in 2018. Primarily due to limited exploration activities and investment preference to brownfield projects, i.e. improve/maintain existing production, dominating the investments. A significant demand may come from offshore wind farms projects around the world, which are on the rise.

SupplyFugro has dominated the supply of site survey services for many years and is the only company covering a full spectrum of the survey services. A number of other companies do exist, but their specialization is limited to a geographic area or technology type. Hence, there is no direct global competitor to Fugro.

In GCC there are a number of smaller companies providing the services. An evident trend in the supply side is the emergence of local service providers in the lower-end segment. In addition, the majority of equipment and vessels used in the services is manufactured/owned by 3rd parties.

Key Players

Fugro Survey ( Global)

EGS Survey ( Semi global)

Horizon Survey ( MENA and SEA

Gardline Geosciences ( Europe & Americas)

Helms Geomarine ( SEA)

Asian Geos / Java Offshore ( SEA )

Oceaneering ( Global)

External Scanning

New Entrance is Low

Knowledge and experience is difficult to overcome

Cyclical market

Supplier Power is Low

Accumulated knowledge is key

Competitive Rivalry

Competitive environment

Low switching costs

High entry barriers

Equipment manufactured by 3rd parties

Buyer Power is Medium

Many providers

Critical to buyers

Cyclical demand for services

Substitution

Does not exist

Portfolio Positioning

LEVERAGE - Due to high cost risk, active competition and other factors, this category falls into being LEVERAGE. This category represents a high risk to revenue and low supply risk.

High

Low

High

Cost & Price Analysis

Price AnalysisThis segment is highly cyclical on the demand side, as such service providers tend to keep the capacity balanced, and in times of higher demand, prices are going up, and vice verse. In addition, due call-out nature, the fixed costs are high. Coupled with cyclical demand and balanced capacity, opportunistic pricing strategies by suppliers is very common in this category.

In the near term, low oil price will put price pressure on services companies and manufacturers. Yet, service companies may sustain this pressure by offsetting slowed demand with cable laying and wind farm industries.

Cost Analysis

Majority of equipment and vessels used in the services is manufactured by 3rd parties or leased. Hence, service companies build up their fleet based on anticipated demand. Very few companies have in-house R&D and manufacturing capabilities. Those companies would have a significantly higher cost basis that would make them less competitive in a lower end segment.

Below are the major cost drivers:

Depreciation costs - has a direct impact on the prices, as purchased equipment is depreciated over various time periods. With cyclical demand for the services, this is one of the highest cost element.

Steel prices - directly impacts the cost basis of tools and vessels

Personnel costs - highly volatile, site survey personnel is a very skilled job and lack of highly experienced personnel is always evident. Oil price slump and massive redundancies in the industry may have a limited impact on personnel rates.

Strategy

Suppliers' quality and experiences are the key areas to consider. Competitive tendering with robust technical evaluation model would provide tremendous benefits, both technical and commercial.

Introducing risk and reward mechanism, whereby service provider's performance is rewarded and underperformance in penalized, might result in a faster survey job

Carving out weather risks from service company liability may result in very significant cost savings, as contractors tend to be very conservative when estimating weather standby days and always build in the worth case scenario

Refrain using lump sum contracts if the scope and risks have any uncertainty

Ensure the scope if very clear so there is less uncertainty to service companies